The tech-centric Nasdaq Composite has fallen 2.6% since July 21, leaving many investors asking us, "Are we in a tech bubble?"
On July 20, the Nasdaq hit a record high of 5,231.94. Then, investors started worrying that tech stocks had become overvalued, and the downward pressure on the index began.
But there are two important things to remember when talking about a tech bubble...
The tech-centric Nasdaq Composite has fallen 2.6% since July 21, leaving many investors asking us, "Are we in a tech bubble?"
On July 20, the Nasdaq hit a record high of 5,231.94. Then, investors started worrying that tech stocks had become overvalued, and the downward pressure on the index began.
But there are two important things to remember when talking about a tech bubble...
Since the last bona fide financial bubble, the real estate and credit bubble of 2007 to 2009, it seems like every time anyone pays a few pennies too much for a stock, there is a flock of analysts ready to start crowing "bubble!" like so many birds on a wire.
I believe that any pundit who calls a sector or market a "bubble" when they really mean "fundamentally or technically overbought" should be banished from pontificating until the real bubble appears.
And the charts I have to show you prove it...
Many experts claim we're not in a bubble economy because they can't see the "bubble."
Why is beyond me.
The bubble is so enormous that any serious bailout attempt would have to encompass the entire shootin' match, or roughly $600 trillion to $1.5 quadrillion ($1,500,000,000,000,000) in order for it to work.
That's the total estimated amount of outstanding derivatives, credit default swaps, and exotics outstanding according to various industry sources.
I say estimated because nobody actually knows for sure, as the derivatives markets remain almost entirely unregulated.
And, that's why the well-intentioned but completely misguided onesey-twosey's bailouts and Band-Aids we've seen so far won't cut it despite the fact that they're already into the trillions of dollars.
I say this because, despite what most politicians and central bankers think, we are not staring at a series of independent bubbles blown into the wind, but a single, massive all-encompassing monster bubble that surrounds us all.
But don't abandon the ship yet. We can get through and take our profits at the appropriate time; all it takes is a little moxie and a steady game plan like this one...
The housing market is bracing for another shock. Thousands of borrowers who took out home equity loans during the bubble years are now getting alarming news - their monthly payment will soon triple. And as more bubble-era home equity loans reach their 10th birthday, more homeowners will be affected.
This 'wave of disaster' is just getting started...
Between the stock market, bitcoin, and tech IPOs, today everyone seems in a race to spot the next biggest asset bubbles readying to pop.
The term "asset bubble" indicates that there is a marked, noticeable divergence between the market price of an asset and its fundamental value. In other words, something that people store value in - a coin, a house, a share of stock - is valued much, much higher than the thing itself could possibly be worth.
Bubbles usually end with crashes: double- or triple-digit percentage losses in the price of the inflated asset over a very short time.
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This year has seen the busiest U.S. IPO market since 2007, with 199 companies already going public.
Their performance has investors fearing we've hit IPO market bubble territory.
Of the year's 199 IPOs, 23% priced above their initial IPO ranges.
Through the first two weeks of November, 16 companies have doubled their initial public offering price. Six companies doubled their IPO price on the first day of trading alone.
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For three ways to profit from this "new reality," please read on...
